80/20 – Customer Gold Program® Learn who your top 20 are.

Do you know who the top 20% of your customers are?

Top Ten Tip of Week. This week we will address the 80/20 Customer Gold Program®

Welcome to Part 3 of 10.

80/20 Customer Gold Program® By: Dale S Richards

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I have used this important customer relations principle to increase revenue by 20% to 200%. A key to this performance gain is to turn a reactive customer service program into a strategically designed and proactive customer service program. This takes about 3-6 months to design and implement but accrues four amazing benefits:

• Synergistic sales
• Frequent referrals
• Increased customer retention
• Improved employee engagement

How can you use the 80/20 principle to PROACTIVELY increase your revenue by 10% – 200%?

First, you must find out who the top 20% of the customers are. Take your customer sales data for the last two or three years and download this data to an Excel Spreadsheet. Once it is downloaded sort from highest revenue to lowest. (You should also look at the customer by a margin.) Add a column for cumulative percent on the side of the revenue sort. Sum each row until you reach 80% of the total revenue. Now you know the top customers.

If you complete this analysis over several years you can also discover top customer revenue and margin trends. It might be a surprise that some customers that were at the top a few ago may not even be on the list. This is an opportunity to visit them and discover why they left and invite them to return. There are a number of ways to invite these customers back to your business, these techniques are often referred to as customer acquisition as the business is acquiring new customers. This is normally done through personalized marketing, making sure it reaches the right people that would probably be interested in your business. That’s one way of bringing people to your business and increasing revenue.

Once the top 20% or 80/20 Customer “Gold Program”® customers are determined then a methodical program can be designed to build relationships with key people within the organization. What people’s titles would you want to build a relationship with? Chief Executive Officers (CXOs), purchasing agents, accounts payable, project directors, sales departments, etc. Now strategically have a corresponding department person in your company build a relationship with them. How do you find out what these people like or enjoy? Meet or talk with them to get to know them better. This process will build a proactive vs. reactive customer relationship.

KNOWLEDGE IS POWER

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This principle also applies to interactions with family, friends, employees, and acquaintances. It is amazing how much relationships improve with active listening.

GOALS – COACHING- ACCOUNTABILITY – REWARDS

A supervisor/manager/executive should brainstorm with each employee for ideas on how to improve their job, effectiveness, and productivity, rather than a top-down mandate for performance improvement. If an employee is engaged in the process, the probability of success goes up significantly.

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